On Tuesday I quoted Chicago anti-privatization activist Tom Tresser about why corporate America is falling in love with cities: “We have a massive global movement of capital which, because they’ve burned their own fucking houses down through their own greed, don’t have the gilt returns that they’re used to receiving…. So the new guaranteed annual returns that big business and big capital are looking for is our assets.”
Consider the very model of the modern major municipal contractor: Cubic. Trading on the NASDEQ with a market capitalization of almost a billion dollars under the adorable stock symbol CUB, Cubic earns over 99 percent of its revenues from government contracts, according to a Credit Suisse equity research report. When it’s not mismanaging urban fare-transit collection systems like Chicago’s Ventra, it does a once-pretty trade as “the leading pure-play provider of [the] defense training and mission support service areas which stand at the heart of modern military practices.” But, as we’ll see, defense isn’t offering the gilt-edged returns it once did. So look for Chicago’s very stupid smart cards to come soon to a city bus near you. Look, in other words, for Cubic to be picking your pocket, too.
Cubic was founded in 1951 in a San Diego storefront as a modest electronics company specializing in precision distance-measuring equipment. In 1966 it developed the first electronic stadium scoreboard. Then it gained worldwide recognition for the first satellite-based surveying system—expertise that turned out to be useful for getting its foot into the door where the real money was: defense. Tracking systems for military aircraft. Measurement apparatuses for missile ranges. “These core technologies,” Credit Suisse’s analysts explain, “led to the development of combat training instrument displays.” By 1973 it had created the “world’s first Top Gun ACMI system for the Marine Corps Air Station at Yuma, Arizona,” whatever that is; “Later, Cubic pioneered the world’s first turnkey ground combat/instrumentation system at Hohenfels, Germany. The same technologies were incorporated into Cubic’s broadcast data links and combat personnel recovery system, which were used successfully during Operation Desert Storm and in peacekeeping operations in Bosnia.”